Spanish Pundit: Chávez, freedom of expression and oil fields

Chávez, freedom of expression and oil fields

miércoles, mayo 02, 2007

Two weeks ago, Venezuelan blog Devil's Excrement reported about the Venezuelan police had stopped the showing of a film, La Fiesta del Chivo, on April 9th:

--And there is so much freedom of speech in Venezuela that the police and the Bolivarian Circles stop the showing of the movie “La Fiesta del Chivo” on April 9^th. at the Universidad Nacional Experimental del Tachira and not one of the major newspapers or broadcasting stations has the guts (I wanted to use a different word) to report it.

Jeez, I wonder why they are bothered by a movie about an autocratic Dictator, who develops a cult of his personality, creates a single political party and destroys all semblance of institutionality in the Dominican Republic? I really can’t see the parallel!

Well, I have began pointing this out because a lot of what is going on in that beautiful Caribbean country has to do with the fact that Chávez is now more a dictator that a democratic ruler. In fact, the persecution of the people who denounce the real nature of Venezuelan regime are now just part of a complot payed by evil-Satanist USA (h/t Blogbis),according to Venezuelan minister of Comunication, whose name is William Lara -you know, he is a complot in himself: his name is evil-satanist English...-. Well, Bush, you have to send me my check please. ;)

The robolusión has also tried to attack the integrity of several scientists, including Claudio Mendoza -background here-:

The Bolivarian Assembly of workers of the Venezuelan Institute for Scientific Research , the country’s most prestigious scientific institution, wrote the Communiqué below. This pathetic document pretends to attack the integrity of some of the most distinguished scientists by people who live off science but have no clue what it is or does for a country. Once again, they attack one of the country’s most distinguished researchers Claudio Mendoza who is called a traitor for is excellence in research and his refusal to be quieted down by the hounds of the regime. This is clearly a censorship and intimidation brigade sent by the Government.
As if in synchrony with the Minister of Communications, it is all made into a destabilizing conspiracy, which supposedly has nothing to do with freedom of speech as if Dr. Mendoza hasn’t been warned many times for going public. Moreover, it shows total disrespect for many Venezuelan scientists that have distinguished careers and who continue to work for the country. The accusations are ironically linked to the shutdown and censorship of TV station RCTV, as simply being part of the conspiracy that the opposition is preparing, as if free speech was not under severe threat in Venezuela. In closing, they also manage to insult the intelligence of foreign reporters calling them ignorant of what is going on in Venezuela.

He also reports about Venezuela being sued by the Human Rights Court "for failing to meet the recommendations made by that Commission as well as violating the fundamental rights of reporters and workers with RCTV". Of course, Venezuela has denied having any issue with Human Rights.

Venezuela has also announced with Bolivia, Nicaragua and Cuba -all of them belong to ALBA, "Treaty of the Market of the People"-, that they were retiring themselves from CIADI, an World Bank organization (h/t Blogbis). CIADI is the arbitration tribunal charged with the conflicts about investing, and any of these countries -especially Bolivia and Venezuela- are very interested in a judicial resolution about their policies regarding their oil and energy.
[In the photo the representants of Nicaragua, Cuba, Venezuela and Bolivia, and the President of Haiti, as guest artist].

As he has announced, Chávez seized the last of the non-nationalised oil resources. Business Week described what was planned:

Russian-made MiG fighter jets will swoop overhead and army troops will flank Venezuelan President Hugo Chávez when he takes over four heavy-oil projects from their foreign owners May 1. The staged theatrics by the fiery nationalist, including a rally by red-shirted supporters of Chávez's Bolivarian revolution, are aimed at driving home the message that Big Oil is no longer in charge in Venezuela.

Exxon Mobil (XOM), Chevron (CVX), ConocoPhillips (COP), BP (BP), France's Total, and Norway's Statoil (STO) had little choice but to turn majority control of their operations in Venezuela's oil-rich Orinoco River basin region to state-run oil company Petróleos de Venezuela (PDVSA). While most of the companies are expected to remain as minority partners, terms haven't been negotiated yet for compensation of the takeovers. Energy & Oil Minister Rafael Ramirez said last week that a final agreement might not come until late June. "I'm not sure that all the oil companies will stay," says Pietro Pitts, editor of Caracas-based Latin Petroleum magazine. "They are looking at the long-term and want some assurance that their contracts will be observed."

Chávez said on Apr. 29 that the takeovers represent the "last step" in his dogged efforts to regain state control over the country's oil riches. Venezuela, the world's fifth-largest oil producer, sells two-thirds of its production to the U.S., accounting for 14% of U.S. imports. "We are going to take over some oil fields that have continued to be in the hands of transnationals," Chavez said in a meeting of regional leaders.

About the present state of the company it says:

Analysts estimate that PDVSA, which now holds a 30% to 49.9% stake in each project, may have to pony up to $6 billion to increase its stake to 60%, unless it pays in oil. The company, which recently sold $7.5 billion worth of bonds to ease cash-flow problems, may also have to pay off jittery bondholders and banks that don't trust it to honor existing debt covenants, and that could cost billions more.

Just as important, PDVSA must also allay fears and encourage its foreign partners to stay and continue to invest in the projects, which produce about a fifth of the country's current output of 2.4 million barrels a day. With oil prices so high, most of the companies are expected to go along with the new deal, but they may be wary of pouring in more money now that the projects will be operated by PDVSA's thinly staffed management and engineering ranks.

The Washington Post describes the company PDVSA (h/t Blue Crub Boulevard):

The firm, which previously had a minority stake in each of the projects, will now be better positioned to make key decisions on production and refining, and on how to manage the workforce. It will also assume more responsibility for investments. But the fields contain a heavy, molasses-like oil that is highly expensive and problematic to refine — and the state company could face severe financial and technical challenges, analysts say.
[...] Company filings and interviews with oil analysts show that PDVSA has failed to invest in infrastructure and is unable to ratchet up production. If prices tumble — unlikely in the near term, but almost certain in a historically volatile industry — the company would have difficulty making up for the shortfall, troubling for a country that depends on PDVSA for three-quarters of its export revenue.

The foreign countries have invested $20 million dollars there is recent years.

Moonbattery and Noisy Room.Net have more.

Gas prices rise in the US as Chávez seizes last private Venezuelan oil fields.
Conoco Phillips seeks more talks as it loses its Venezuelan operations.

But for the Time is not so radical move:

From Mexico to China, more than 75% of the world's oil reserves are controlled by national oil companies today. Of the world's top 20 oil-producing firms, 14 are state-run. And even though Chavez has now stripped foreign oil companies like Exxon Mobil of any majority stakes they had in Venezuelan oil production projects — mandating that his state-run company, Petroleos de Venezuela (PDVSA), have at least 60% ownership from here on out — he's at least allowing those private multinationals to continue taking part in the drilling. Not so, for example, in Mexico or the world's largest oil producer, Saudi Arabia. Washington touts those two countries as model energy allies, despite the fact that for more than half a century their national oil companies have barred U.S. and other foreign oil businesses from production ventures.

There is a slight difference, Time...: Saudi Arabia has never allowed someone to buy those assets and afterwards have occupied them, without any compensation. WE don't know if these companies are going to have one, because this is the day that there have been no negotiations -even- to fix the payment Venezuela must do to these companies.

Time must be one of the idiots Daimnation! points out.

But we continue:

Chavez, who is determined to reduce Venezuela's dependence on the U.S. market, is betting that high oil prices as well as deep-pocketed ideological allies like China and Iran will help make up for any investment shortfall. It's a risky gamble — but not much riskier than U.S. energy policy. Between 2001 and 2006, U.S. gasoline consumption decreased by a laughably small 1%, according to a recent study by the University of California at Davis. Americans could blunt the effects of policies like Chavez's by lessening their dependence on foreign oil. But that, it seems, would be too radical.

More demagogy: From FT.com:

Mr Chávez also took advantage of international workers’ day to announce a 20 per cent increase in the national minimum wage. He said that the increased wage was equivalent to $286 (€209, £143) a month, “one of the highest levels in the whole of the American continent”.

However, inflation figures released for April showed a rise in prices of 1.4 per cent in the last month, causing year-on-year inflation in the last 12 months to rise to 19.4 per cent from 18.5 per cent a month earlier.

Outside the Beltway and FreedomWorks also points out more about the situation in Venezuela:

Faced with an accelerating inflation rate and shortages of basic foods like beef, chicken and milk, President Hugo Chávez has threatened to jail grocery store owners and nationalize their businesses if they violate the country’s expanding price controls.

Food producers and economists say the measures announced late Thursday night, which include removing three zeroes from the denomination of Venezuela’s currency, are likely to backfire and generate even more acute shortages and higher prices for consumers. Inflation climbed to an annual rate of 18.4 percent a year in January, the highest in Latin America and far above the official target of 10 to 12 percent.

[About food rationing in Venezuela, read here].

On May 1st also the Confederation of Workers was not allowed to march because the act was going to be held "within the security zone of the Miraflores Palace". Hmm, wasn't Chávez a leftist...???? So, why is he forbidding people to march on the Workers' day?

This happened the same week-end in which Venezuela, as Ecuador made some days ago, has pulled out of the World Bank (h/t Noisy Room.Net):

“We will no longer have to go to Washington nor to the IMF nor to the World Bank, not to anyone,” said the leftist leader, who has long railed against the Washington-based lending institutions.

Chavez said he wanted to formalize Venezuela’s exit from the two bodies “tonight and ask them to return what they owe us.”

Captain Ed reports that what Chávez really wants is to arrive to a partnership with China:

In late March, Mr. Chávez unveiled a raft of proposed oil-related deals with China valued at about $13 billion. Under terms of the prospective deals, China National Petroleum Corp. would develop, together with state oil company Petroleos de Venezuela SA, the biggest chunk yet of Venezuela's Orinoco River region -- the same area where Mr. Chávez is nationalizing the Western companies' projects. Oil produced there would then be ferried to China in a new, joint "super fleet" of tankers, and processed there at three new refineries built to handle Orinoco heavy crude.

The Venezuelan leader's goal is to supply China with one million barrels a day by 2012, up from 150,000 barrels a day. While many analysts doubt Mr. Chávez's ability to deliver on his promises, Venezuela's exports to China have grown quickly, from 12,000 barrels a day in 2003. Meanwhile, with oil production falling and China's share rising, exports to the U.S. fell 8.2% in 2006 from 2005, and Nigeria has replaced Venezuela as the U.S.'s fourth biggest source of crude oil after Canada, Mexico and Saudi Arabia.

Result? just as Bolivians were fleeing Bolivia, Venezuelans are fleeing Venezuela (h/t FYI).